Vedanta Resources dollar bonds see minor uptick

Mumbai: US dollar bonds of London-based Vedanta Resources (VRL), the holding company of metals conglomerate Vedanta, recovered marginally on Thursday, a day after falling as much as 1 to 1.5 points in response to US short-seller Viceroy Research's bearish report that reignited concerns of unsustainable debt.

On Thursday, the bonds gained across maturities from 2028 to 2033, according to traders. Analysts said the report failed to offer any new insights to investors and simply reiterated well-known concerns in an aggressive tone.

While Viceroy accused the debt-heavy parent of listed Vedanta of operating a "ponzi scheme," claiming it survives by siphoning cash from its "dying host," both JPMorgan and Bank of America pushed back.

JPMorgan said in a note after Viceroy published its findings that it saw limited financial stress at Vedanta (VDL) after excluding Hindustan Zinc (HZL), the group's key cash generator.

The brokerage, in its report to debt investors, said that VDL (excluding HZL) reported Earnings before interest, taxes, depreciation, and amortization (Ebitda) of $3.1 billion in FY25 with a manageable net leverage of 2.2x.

"We struggle to see financial stress at VDL with these metrics," the report said.

Similarly, Bank of America (BofA) in a note shared with investors said that the short-seller report on Vedanta Resources does not reveal much new. Most issues raised like the company relying on dividends and brand fees to pay its debt, or frequent leadership changes, are already known.